The strongest sectors of the S&P 500 this year include many shares of companies that pay high dividends and have kept investors’ faith by not cutting payouts for at least the past five years. The two hot sectors are telecommunications services and utilities, and Howard Gold looked at the reasons for their strength. These sectors are known to feature many stocks with high dividend yields. The market values of income-producing investments are sensitive to changes in interest rates, and all things being equal, that’s a concern when interest rates look set to rise, as is the case this year.
Some companies among the two sectors have cut dividends, and their executives certainly believed they had good reasons to make those cuts. They may have needed to hold on to the cash to fund acquisitions, for example. But income-seeking investors were sure to be disappointed no matter the reasons. So we narrowed the list to the highest-yielding S&P 500 telecom and utility stocks that not only paid regular cash dividends for the past five years, but also didn’t cut dividends payouts. Among the companies on this list, AT&T Inc. T, and Consolidated Edison Inc. ED, also are among the 50 stocks included in the S&P 500 Dividend Aristocrats Index SPDAUDP, which is maintained by S&P Dow Jones Indices.